Xi Jinping transforms oil into a strategic tool
The article focused on how China has transitioned from a heavy reliance on imported oil to a strategy of massive oil reserves to enhance its geopolitical and economic security. Since 2014, the Chinese government has prioritized building the largest oil reserve stockpile in the world, reaching a total capacity of between 1 billion and 1.4 billion barrels, enough to meet approximately 120 days of demand. These substantial reserves have helped China reduce its oil imports by 23% between March and July 2026, decrease dependence on foreign oil—particularly by lowering refinery activity and relying more on alternative domestic sources such as renewable energy and coal-to-liquid technologies. They have also contributed to moderating global oil prices and provided China with greater capacity to manage potential crises, such as confronting an Iran war or tensions with the United States over Taiwan—especially given that most of its imports pass through the Malacca Strait. However, these reserves are not infinite. With China relying on imports for up to 70% of its oil before the war, it faces economic challenges due to declining exports of petroleum products and rising refinery costs. Nonetheless, China's ability to hedge against oil disruptions has strengthened its geopolitical resilience and reduced vulnerabilities it previously considered significant. This grants China greater tools to control its energy security in the future.
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